A guarantor can be any person from your family, friend or colleague. They co-sign the loan application along with the borrower to provide a guaranty to the loan provider that if in case the borrower is not able to repay the borrowed sum for that always reason before the guarantor will be requested for the payments. In the first look, it appears quite simple that it’s a matter of doing a signature only but the fact is its a lot more than a signature. If everything goes properly and the borrower does the timely repayments then there is nothing to worry but there can be an unfortunate situation of skipping EMIs for more than a month, where the loan provider can reach out to the guarantor and ask him for the repayment of the outstanding amount. And if the guarantor fails to do so the lenders have the authority to get legal actions against both the main borrower and the guarantor also

Situations for Which Banks request for a Guarantor

  • If the applicant has a lower CIBIL Score.
  • If the loan amount is higher
  • If the applicant has a personal age.
  • If the applicant’s profession is risky one particular the place there is no safety of fixed {income
  • The final {thing is in some of the banks it’s a financial institution policy to provide a guarantor.
  • Things to Know being a Loan Guarantor

Impact on Credit Score

When one signs a loan agreement as a guarantor for someone else and the loan has defaulted, it reflects on the CIBIL Report of the guarantor as properly. After a certain period along with the most important borrower, the credit score of the guarantor will also be precious adversely. The Credit Information Businesses, such as CIBIL and Equifax always keeps a track of the repayment of the loan and if the EMIs are defaulting then along with the main borrower the credit score of the guarantor also gets affected. If the borrower is prompt and timely regarding with his/her payment there will be a good impact on both the borrower’s and guarantor’s credit rating.

 

Impact on Personal loan Assets

If you are a guarantor of a loan whose primary borrower is able to repay the borrowed amount (defaulted), in this situation the bank will at first try to liquidate the main borrower’s assets to recover the income. But before doing this the loan provider will approach you as you were the guarantor for that borrowing. The lenders may request you to pay off the outstanding amount. In case you are unable to repay the loan the bank can legally seize and liquidate your personal assets like land, property etc and so on and so forth. to recover the outstanding amount. You can only survive with this situation when the main borrower is ready to repay a loan by selling his residence.

Impact on the Credibility

It is important to know that if you are a guarantor for any loan, then it will be counted on your open lines of credit and therefore your personal eligibility will be hampered. If there is a defaulting in payment your score will take a success too. However, if the situation like this continues and you want to get a loan for by yourself you face difficulty in this because simply of low credit score. But don’t depend on the main borrower completely if he/she is a conscientious borrower because their timely repayments will not help your score gain considerably height. We offer online personal loan at very low interest to the individuals who are looking for it.

Arrange for a More than One particular Guarantor

It is not just to do a thing but before signing the agreement as a guarantor you can ask the borrower to arrange one more guarantor so that your response can be shared.

Contact name: Shashi

E-mail: shashi.better@gmail.com –

Phone – +91 8368 934 316

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